Self Employed Liability Insurance - Important Facts And Tips For Consideration
For the self employed, liability insurance is no optional luxury
. It is an essential business expense and is often a requirement for working with other business contractors, especially in the building trades. This type of business coverage pays for property damages, or proposed damages, and bodily injuries occurring on business premises or caused by the actions of or negligence by an employee of the business. In some cases libel and slander are covered as well. A liability policymay be included in a business owner's policy, or BOP, but additional coverage can be purchased separately if higher limits are needed.
Here are a few basic facts and tips for consideration for self employed liability insurance. Liability insurance is designed to protect the assets of businesses of all sizes, from the sole proprietor, to small local enterprises, to million-dollar international corporations. In the current sue-happy business environment, litigation has become all too prevalent, and just one frivolous, unfounded lawsuit can mean a business shutting its doors for good. This is especially true for small business operators, whose reserve funds are unlikely to cover the legal costs and any awarded claims in even a single liability case.
Self employed liability insurance coverage needs are determined by the same factors larger businesses take into account. Coverage requirements are based on both perceived risk, which is the level of risk of injury or property damage typically associated with that particular business industry, and the state the company conducts business in. The latter is due to some states historically awarding higher than normal damage claims. Business owners have two options in liability insurance policies. The first is the per-occurrence option which covers a claim long after an incident occurred, but within the limits of the policy in effect at the time of the occurrence. The second is the claims-made policy option. With this type of coverage, a claim of injury or property damage must be reported during the policy coverage period for any awarded claim to be paid.
It is advisable for business owners to consult with their accountant, attorney, and insurance agent to determine their self employed liability insurance requirements. Basic key factors need to be analyzed. These include total yearly revenue, premium and deductible payments, whether the business is at a single location or is a service business operating at various locales, and other specific particulars pertaining to business operations. Conducting yearly re-evaluations are always in order, as businesses often grow in size and scope.
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